The Ambiguity of Long Service Leave Laws - Q&A Part 2

Posted on 04 November 2011

This post is a continuation of a blog published on 1 November 2011 regarding Long Service Leave.

Calculating Long Service Leave Entitlements

Q. If I decide to take long service leave how much will I be paid during my leave period?

A. In NSW weekly long service leave payments are calculated based on either:

  1. the workers ordinary pay in the preceding week before the leave is scheduled to take place; or
  2. the average weekly ordinary rate of pay earned over a 5 year period,

whichever of the two calculations results in the highest amount.

Q. Does my long service leave pay also include other employment entitlements?

A. In NSW, if a worker earns under $144,000.00, bonuses and commissions should be included in calculating long service leave pay. Other entitlements, such as, penalty rates and overtime payments are generally excluded.


Accruing Long Service Leave Entitlements

Q. What if I am currently on annual leave or the like, will my long service leave continue to accrue?

A. Long service leave entitlements continue to accrue whilst on any form of employer-authorised leave, including annual leave and long service leave itself. Being on annual leave and long service leave is still considered to be service.

However, it is important to note that long service leave does not accrue whilst on unpaid maternity leave as it does not count as service.

Q. What if I am posted to work for an overseas office of my current company, will my long service leave continue to accrue?

A. If a worker based in NSW (or alternatively a worker with a strong connection to a NSW company) is subsequently posted overseas to work for the same company or a subsidiary of the same company, the workers long service leave entitlement will continue to accrue.

Taking Long Service Leave in Advance

Q. Can I take long service leave in advance of it being accrued?

A. Workers in NSW are entitled to take long service leave in advance provided it is permitted by their employer. The period of leave must not be less than 1 month in duration.

Merging or being Acquired by another Business

Q. What if my current company is being purchased by another company, what happens to my long service leave entitlements?

A. Unlike accrued service for the purpose of annual leave and redundancy pay, which the acquiring company may choose not to recognise, the acquiring company must recognise long service leave entitlements. Essentially, ‘long service leave has to go over in a sale of a business’. i

The reason for this is because unlike annual leave and redundancy pay benefits, which the vendor business must pay out if the acquiring business refuses to recognise it, there is no basis for a vendor to pay out long service leave in the same circumstances and the law does not state otherwise.


Q. Am I permitted to cash out long service entitlements?

A. Unlike annual leave, which can be cashed out under the National Employment Standards (in certain circumstances), long service leave can never be cashed out.

Further Help

Whether you are an employer or employee, we are here to assist you understand the long-standing and often complicated laws surrounding long service leave entitlements. We can help you ensure that you meet your respective obligations and ensure that your rights are protected in respect of long service leave. Please contact us if you have an enquiry.

i Hrdaily, ‘Outdated LSL laws creating headaches for employers’, <http://www.hrdaily.com.au/nl06_news_selected.php?act=2&stream=All&selkey=1974&hlc=2&hlw=> accessed 20 October 2011.

Back